Birdwell v. McKinney, et. ux. ( 1997 )

IN THE COURT OF APPEALS OF TENNESSEE
WESTERN SECTION AT NASHVILLE
GARY BIRDWELL, individually and )
d/b/a BIRDWELL HOME BUILDERS, )
)
Plaintiff/Counter-Defendant/ ) Robertson Circuit No. 6973
Appellee, )
)
v. ) Appeal No. 01A01-9701-CV-00023
)
BRADLEY S. McKINNEY and
ELIZABETH P. McKINNEY,
)
)
)
FILED
Defendants/Counter-Plaintiffs/ )
Appellants. )
December 17, 1997
APPEAL FROM THE CIRCUIT COURT OF ROBERTSON COUNTY
AT SPRINGFIELD, TENNESSEE
Cecil W. Crowson
THE HONORABLE JAMES E. WALTON, JUDGE
Appellate Court Clerk
For the Plaintiff/Counter-Defendant/ For the Defendants/Counter-Plaintiffs/
Appellee: Appellants:
Homer R. Ayers Steven E. Anderson
Goodlettsville, Tennessee Nashville, Tennessee
AFFIRMED IN PART AND
REVERSED IN PART
HOLLY KIRBY LILLARD, J.
CONCURS:
DAVID R. FARMER, J.
SAMUEL L. LEWIS, J.
OPINION
This case arises out of the construction of a home. The builder filed suit against the
homeowners for monies allegedly due him, and the homeowners countersued for alleged contract
breaches and defects in construction. The trial court found that both parties had breached the
contract and awarded damages to both parties with a balance due the builder. Both parties appeal.
We affirm in part and reverse in part.
In 1993, Plaintiff/Counter-Defendant/Appellee Gary Birdwell (“Birdwell”) and
Defendant/Counter-Plaintiff/Appellants Bradley and Elizabeth McKinney (“McKinneys”) entered
into a contract for Birdwell to construct a residence for the McKinneys in Robertson County,
Tennessee. The contract incorporated by reference plans and specifications and set forth a contract
price of $158,472.00, subject to certain “allowances” specified within the agreement. The parties
agreed that the purchase price would not exceed this amount so long as the costs listed in the
allowance provision did not exceed the amounts stipulated. The contract stated that all modifications
must be in writing.
Construction on the house began in August of 1993. The parties continually bickered about
numerous alleged deviations during the construction. Bradley McKinney began to closely oversee
the progress of the construction and even began to pay some of the sub-contractors directly for
allowance items. The McKinneys moved into the house in May 1994 before the home was
completed, and changed the locks. At the scheduled closing in June 1994, the McKinneys refused
to pay the full contract price. Consequently, Birdwell filed this lawsuit.
The McKinneys had already tendered to Birdwell $92,000.00. In his lawsuit, Birdwell
claimed that he was owed the total sum of $41,877.65. This included the remainder of the contract
price due (less allowance items for which the McKinneys had reimbursed him) plus $4,151.65 for
the McKinney’s alleged refusal to pay him for certain modifications or additions to the agreement.
The McKinneys countersued for alleged breaches of the contract and alleged defects in
construction committed by Birdwell. The McKinneys sought damages totaling $22,184.86. Both
parties sought attorneys’ fees.
After a bench trial, the trial court held that both parties had breached the contract. The trial
court found that Birdwell had breached the contract by varying from the plans. It also found that the
McKinneys had breached the contract, by refusing to pay for construction performed, making
modifications during the construction, and interfering with Birdwell’s ability to perform.
The trial court found that Birdwell had incurred damages totaling $40,377.11. The trial
court also found that the McKinneys incurred damages of $29,957.01 as a result of Birdwell’s
breach. After setting off the damage awards, the trial court held that the McKinneys owed Birdwell
a total of $10,420.10. Neither party was awarded attorneys’ fees. Both parties now appeal the
decision of the trial court.
On appeal, both parties raise a host of issues. The McKinneys assert that the trial court erred
by considering alleged oral modifications to the contract, when the contract explicitly states that all
modifications must be in writing. In addition, the McKinneys argue that the trial court erred by
failing to credit the McKinneys the sum of $4200.00 for allegedly having paid Birdwell twice for
certain bathroom fixtures. The McKinneys further contend that the trial court erred by failing to
credit the McKinneys for damages caused by alleged defects in construction caused by Birdwell.
The McKinneys also assert that the trial court erred by not awarding them attorneys’ fees and a
contractor’s profit.
Birdwell alleges on appeal that the trial court erred in finding that Birdwell had breached
certain provisions of the contract. Birdwell also contends that the proper measure of damages should
have been the difference between the value of the house if properly built and the value of the house
in its defective condition. Birdwell further argues that the trial court erred in calculating damages
based on the testimony of the McKinneys’ expert. Birdwell also seeks attorneys’ fees, prejudgment
interest amounting to $5,177.34, and $5000.00 for “additional time spend [sic] and delays in the
performance of the Contract caused by McKinney’s actions.”
Our review of the findings of fact by the trial court is de novo upon the record of the trial
court, accompanied by a presumption of correctness of the factual findings unless the preponderance
of the evidence is otherwise. Tenn. R. Civ. P. 13(d). Questions of law are de novo with no
presumption of correctness. Carvell v. Bottoms, 900 S.W.2d 23, 26 (Tenn. 1995).
The McKinneys assert first that the trial court erred in considering alleged oral modifications
to the contract, in light of the express contractual provision that all modifications to the contract must
be in writing and signed by both parties. The McKinneys argue that this clause should be strictly
enforced.
It has been held that written contracts may be orally modified even if the contract contains
such a clause. Co-operative Stores Co. v. United States Fidelity & Guaranty Co., 137 Tenn. 609,
2
622-23, 195 S.W. 177, 180 (1917). In Moore Construction Co. v. Clarksville Dept. of Elec., 707
S.W.2d 1 (Tenn. App. 1985), the court considered a written change order requirement in a
construction contract. The court held that although such a clause is valid, it may be waived. Id. at
12-13. According to the court:
The waiver of a written change order requirement by an owner is not always
required to be in writing but may be the result of the parties’ conduct on the job.
Thus, it is not uncommon for courts to find that an owner has waived a written notice
requirement in cases where extra work has been ordered verbally by the owner or the
extra work has been performed with the owner’s knowledge and without its
objection.
Id. at 13 (citation omitted).
In the case at bar, the parties’ conduct indicates that the clause was waived by the
McKinneys. On numerous occasions throughout the construction, the parties orally consented to
deviations from the exact specifications set forth in the contract. The record indicates that, in fact,
several of these oral modifications were proposed by the McKinneys. The evidence does not
preponderate against the trial court’s finding that the provision was waived, and the trial court did
not err by considering oral modifications to the contract.
On appeal, the McKinneys dispute the trial court’s factual findings that the contract was
orally modified with regard to: (1) an upgrade in plumbing; (2) stair parts and labor; (3) garage door
openers; (4) additional framing for an overhang; (5) an extension of a water line; and (6) additional
insulation. Each of these issues is addressed below.
With regard to the plumbing upgrade, the trial court held that the McKinneys were
responsible for $1,206.00 in costs resulting from their demand to upgrade the plumbing from chrome
to brass. The McKinney argue that no “upgrade” occurred. They claim that the specifications
section of the contract (“specifications”) provides that several plumbing fixtures are “select,”
meaning that the homeowner chooses the desired type of fixture. The McKinneys also argue that
Birdwell has no standing to assert this claim, since the plumbing sub-contractor is the entity that has
not been paid, and this sub-contractor has not filed a claim with Birdwell.
After reviewing the contract and the evidence in the record, the evidence preponderates in
favor of the trial court’s finding that the McKinneys sought an upgrade from the specifications in the
contract. The McKinneys’ argument that Birdwell has no standing is without merit, since the record
indicates that Birdwell is liable to the sub-contractor for this cost.
3
The trial court held that the McKinneys were liable for $1,214.11 in additional costs
associated with stair parts and labor. The McKinneys argue that an allowance item specified “floor
coverings,” and this did not include the handrails and the spindles. Thus, the McKinneys paid for
the costs connected with the steps and the risers but not for the handrails and spindles.
The evidence indicates that Birdwell did not satisfy his burden of proving that the McKinneys
were responsible for this cost. A plain reading of the term “floor coverings” in the allowance
provision of the contract cannot be construed to include the handrails and spindles. The
specifications call for the installation of these handrails. Furthermore, the record does not
demonstrate that the McKinneys demanded an upgrade from the specifications set forth in the
contract. Therefore, the trial court erred in awarding Birdwell $1,214.11 for these costs.
The trial court held that the McKinneys owed Birdwell $436.00 for upgrading the insulation
in the walls of the home. It is undisputed that the specifications called for R-18 insulation. When
Bradley McKinney noticed that the sub-contractor was installing R-13 insulation, he demanded that
it be removed and replaced with R-18 insulation. Birdwell testified that he had intended to achieve
R-18 insulation by installing an R-5 wallboard, along with the R-13 insulation. As a result of
McKinney’s actions, the house now has an insulation class of R-20.
The trial court found that the McKinneys unilaterally modified the contract and, therefore,
were liable for these costs. In addition to arguing that the contract can not be orally modified, the
McKinneys contend that a strict reading of the specifications demands that R-18 insulation be used.
Bradley McKinney also testified that he was unaware that Birdwell intended to use R-5 wallboard.
The evidence preponderates in favor of the trial court’s determination that the McKinneys
unilaterally modified the contract. Therefore, Birdwell was properly awarded $436.00 for this
upgrade. The trial court is affirmed on this issue.
The evidence also preponderates in favor of the trial court’s finding that McKinney modified
the contract by seeking the installment of garage door openers and additional framing for overhangs
and the extension of the water line. Thus, the trial court properly awarded Birdwell $268.00 for the
openers, $461.00 for the framing, and $66.00 for the water line extension.
The McKinneys also challenge the trial court’s refusal to award them damages for certain
alleged deviations from the contract by Birdwell. The McKinneys contend that the contract calls for
an attic floor covering 1300 square feet. Birdwell constructed an attic floor covering 96 square feet.
4
The trial court found that the McKinneys had not proven that Birdwell breached the contract in this
respect, because the contract was unclear on this point.
The McKinneys claim that in the “subflooring” section of the specifications, “attic” is
checked, followed by the phrase, “per plan.” The McKinneys assert that the plans indicate that 2 by
8 framing is to be used to install a complete attic floor. Instead, most of the attic floor consists of
2 by 6s. The McKinneys argue that the second floor ceiling calls for 2 by 8s and 2 by 10s and that
this demonstrates that the attic floor should not consist of 2 by 6s. The McKinneys seeks repair costs
of $3500.00.
Birdwell counters that the contract is unclear and that the amount of attic floor installed was
customary. Furthermore, the architect for the project, Steve Sloan, testified that the plans were
unclear and that he assumed that McKinney and Birdwell would reach an agreement on this issue.
After careful examination of the plans and the transcript, we find that the preponderance of
the evidence does not weigh against the trial court’s finding that the contract does not clearly require
the framing and attic floor asserted by the McKinneys. Thus, the McKinneys have not carried their
burden of showing that the plans called for an attic floor consisting of 1300 square feet, and the
finding of the trial court is affirmed on this issue.
The McKinneys also challenge the trial court’s finding that Birdwell did not breach the
contract by installing a shower stall opening only 22 inches wide. The trial court held that the plans
did not specify an exact dimension and that Birdwell performed “the best he could under the
circumstances.”
The McKinneys note that Birdwell conceded that the plans are to scale. Furthermore,
Birdwell conceded that “[i]t looks like it probably is 36 inches on there.” Nevertheless, Birdwell
constructed the opening only 22 inches wide. The McKinneys seek damages in the amount of
$900.00, based on the testimony of their expert.
The preponderance of the evidence indicates that the McKinneys have shown that Birdwell
breached the contract by constructing the opening only 22 inches wide. The testimony of the
McKinneys’ expert is the only proof in the record pertaining to damages in this regard. Therefore,
the trial court’s finding is reversed and the McKinneys are credited with $900.00 on this item.
The McKinneys further claim that the trial court erred by not finding that Birdwell had
breached the contract by failing to gravel the driveway all the way to the road. The county road is
5
2/10 of a mile away from the house. Birdwell graveled the driveway up to a lane leading to the
county road. The trial court held that the contract is unclear and that, therefore, Birdwell is not
liable.
The McKinneys maintain that Birdwell’s expert conceded at trial that it is customary to
gravel a driveway all the way to the road. The McKinneys also claim that Birdwell admitted at trial
that he did not gravel the “entire driveway.” The McKinneys seek a recovery of $2,191.33 for the
cost of completing the graveling of the driveway all the way to the road.
Birdwell counters that the contract is silent on this issue. Furthermore, Birdwell emphasizes
that since the road is 2/10 of a mile away, graveling up to the lane is all that could be “reasonably
contemplated.”
The preponderance of the evidence indicates that the McKinneys failed to prove that the
contract obligated Birdwell to gravel the driveway all the way to the road. Taken in context,
Birdwell admits in his testimony that he did not gravel the entire amount sought by the McKinneys,
but he does not admit breaching the contract. The trial court’s finding on this issue is affirmed.
The McKinneys next argue that the trial court erred by refusing to award them damages for
Birdwell’s failure to install two basement windows. The plans call for two “windows per grade.”
Windows could not be installed, because they would be below the grade of the yard. The
McKinneys contend that Birdwell could have installed window wells, which could be below grade.1
The McKinneys assert that the windows would not be below grade in the first place had Birdwell
not constructed the basement ceiling shorter than the height specified in the contract. Alternatively,
the McKinneys argue that they should be credited for the costs of labor and materials necessary for
the installation of these windows so that Birdwell does not receive a windfall.
The trial court held that Birdwell did not breach this provision of the contract, since it did
not provide for window wells. The evidence supports this finding of the trial court. The plans
specifically state “windows per grade” (emphasis added). Although it is undisputed that the
basement ceiling height was shorter than that specified in the agreement, the evidence suggests that
the windows would still be below grade if the basement ceiling height had been in strict conformity
with the contract. The McKinneys’ alternative argument has no merit. It is inevitable that both
1
The McKinneys’ expert testified that this expense would cost $2,400.00.
6
parties assume certain risks when a construction contract is executed. In this case, the McKinneys
assumed the risk that the windows might not be able to be constructed per grade.
The McKinneys next assert that the trial court erred by not finding that Birdwell breached
the agreement by not applying a third coat of paint to all rooms in the house. The trial court held that
the McKinneys were only able to prove that a third coat was not applied in two rooms. Therefore,
the trial court awarded the McKinneys damages of $107.01 for the cost of painting these two rooms.
The McKinneys argue that Birdwell testified that, although he thought that three coats had
been applied throughout the house (except for two rooms), the painting sub-contractor, Tim Lassiter
(“Lassiter”), would have superior knowledge. Although Lassiter did not testify, the McKinneys
proffered a receipt from Lassiter stating as follows: “Lassiter Painting painted McKinney House on
Porter Road: Two coats of paint on walls and ceiling, three coats of paint on trim.” Bradley
McKinney testified that Lassiter told him that Birdwell did not ask him to bid for three coats of paint
in the house.2 The McKinneys seek an award of $3,850.00 based on their expert’s estimate of the
cost of adding a third coat to the entire house or, alternatively, an award of $1,000.00 based on an
estimate made by Lassiter.
Birdwell responds by emphasizing that Birdwell testified that he believed that three coats had
been painted in every room but two. Birdwell also testified that the McKinneys consented to the
amount of work that was performed.3
We are unable to hold that the evidence preponderates against the trial court’s holding
concerning this factual finding. This is an issue that involves the credibility of witnesses. The trial
judge is in a much better position to assess the credibility of witnesses and, thus, its findings are
entitled to “considerable deference.” Tenn-Tex Properties v. Brownell-Electro, Inc., 778 S.W.2d
423, 425-26 (Tenn. 1989). Therefore, the trial court’s awarding of $107.01 for the two unpainted
rooms is affirmed.
The McKinneys next contend that the trial court erred by failing to credit them for having
paid Birdwell twice for bathroom fixtures. In the “allowance” provision of the contract, the parties
2
Birdwell did not make a hearsay objection to McKinney’s testimony about what Lassiter told
him.
3
Birdwell also argues that Lassiter’s receipt is inadmissible hearsay. The McKinneys
correctly counter that Birdwell is barred from asserting this defense since he did not raise an
objection at trial. See Pyle ex rel. Pyle v. Morrison, 716 S.W.2d 930, 936 (Tenn. App. 1986).
7
listed “Cabinets w/ corian tops” with a cost not expected to exceed $9746.00. The McKinneys
tendered Birdwell $9864.00 as reimbursement for this allowance. The McKinneys then discovered
that this expense was used to pay for the installation of kitchen cabinets as well as a jacuzzi tub, a
marble shower, and bathroom vanities.
The McKinneys dispute the trial court’s finding that the allowance for “cabinets w/ corian
tops” includes the tub, shower, and vanities. According to the McKinneys, they effectively were
forced to pay Birdwell twice for these fixtures: as part of the basic contract price and as part of an
allowance item. The McKinneys allege that they should be credited $4,200.00, which is the sub-
contractor’s estimation of the value of the tub, shower, and vanities.
The evidence indicates that the trial court erred by not crediting the McKinneys for this
expense. A plain reading of the term, “cabinets w/ corian tops,” would not include the tub, shower,
and bathroom vanities. These fixtures are called for in the specifications and are part of the basic
contract price. Therefore, the McKinneys should be awarded $4,200.00 for this expense.
The McKinneys also claim that the trial court erred by not awarding them expenses
associated with installing shelving. “Shelving” is listed as an allowance item at a cost not to exceed
$400.00. The McKinneys argue that “installation” is not listed as part of the shelving allowance.
Because other allowance items include “installation,” the McKinneys contend that the installation
of the shelving is not an allowance and, thus, is part of the contract price. The McKinneys also
maintain that the other allowance items that did not state “installation” were performed by Birdwell
as part of the contract price. The McKinneys seek a recovery of $211.85 for the cost of installing
these shelves.
A review of the evidence indicates that the trial court erred by not including this installation
cost as part of the contract price. From the terms of the contract, the installation of the shelves was
distinct from the allowance for the shelves themselves. Therefore, the McKinneys are entitled to a
credit of $211.85.
The McKinneys next allege that the trial court erred by refusing to award them for numerous
construction defects that Birdwell acknowledged at trial. Such defects include doors not fastening
properly, lack of weatherstripping, dents on doors, a handrail pulled away from the wall, and the
failure to install an oval window in the front of the house. Birdwell testified that these defects could
be repaired at a cost of between $1,000.00 to $1,500.00. Birdwell’s expert estimated the cost of
8
repair at $2,000.00. At a minimum, the McKinneys seek compensation of $2000.00 for these
defects.
The trial court refused to compensate the McKinneys for these repairs on the grounds that
either they were not Birdwell’s responsibility or that “Birdwell’s final completion of minor repairs
and adjustments were delayed and frustrated by McKinney.” The evidence preponderates in favor
of this finding. The parties dispute whether some of these defects existed when Birdwell left. The
parties also dispute whether Birdwell was given the opportunity to cure the defects after the
McKinneys moved into the house early4 and changed the locks on the house. Such questions relate
to credibility and we defer to the trial judge’s credibility determination. Tenn-Tex, 778 S.W.2d at
425-26. Furthermore, the evidence indicates that the McKinneys orally consented to replacing the
oval window with a vent, so that the gable on the roof would not become overheated.
The McKinneys argue that they incurred a water bill amounting to $524.75 resulting from
the rupture of the water line by one of Birdwell’s sub-contractors. The evidence supports the trial
court’s finding that the McKinneys failed to prove that Birdwell or his sub-contractors were
responsible for the rupture. The trial court is affirmed on this issue.
The McKinneys seek recovery of $350.00 for the repair of alleged defects related to
electrical items caused by Birdwell’s alleged failure to conform to the plans and make proper
installation. The evidence does not preponderate against the trial court’s finding that Birdwell is not
responsible for these alleged defects. Testimony offered by Birdwell disputes whether the plans
called for the installation of certain of these items. Furthermore, the trial court found that the
McKinneys had delayed and frustrated Birdwell’s efforts to cure all the minor defects.
In addition, the McKinneys claim that the trial court erred by not awarding them a
contractor’s profit for the repair costs of breaches of the contract caused by Birdwell. The
McKinneys’ expert calculated this as twenty percent above the ordinary cost. The McKinneys
contemplate a general contractor supervising the sub-contractors for additional repairs. In light of
the fact that only a few repairs need to be made as a result of breaches committed by Birdwell, it
would be unnecessary to hire a contractor to oversee sub-contractors. Thus, it would be
4
This was done in breach of the contract.
9
unreasonable to award the McKinneys recovery for a contractor’s profit. The trial court’s decision
on this issue is affirmed.
Finally, the McKinneys challenge the trial court’s refusal to award them attorneys’ fees.5 The
contract provides that if either party breaches the contract, the breaching party is responsible for
attorneys’ fees. Since both parties breached the contract, neither is entitled to attorneys’ fees.
On appeal, Birdwell challenges certain findings made by the trial court that Birdwell
breached the agreement.6 Birdwell alleges that the trial court erred by finding that Birdwell breached
the contract by not applying insulation between the first and second floors of the home. The trial
court awarded the McKinneys $3,000.00 for this expense.
Although Birdwell admits that the plans called for the insulation, he appears to claim that an
oral modification occurred, since it is not customary to install insulation between those floors and
because the McKinneys did not voice their objection to Birdwell’s failure to install it. The evidence
supports the trial court’s finding that Birdwell breached the contract by not installing the insulation.
The trial court’s decision on this issue is affirmed.
Birdwell also appears to contend that the trial court erred in awarding damages of $5,050.00
for repair work on a screened-in deck. The trial court found that Birdwell installed wooden posts
for the deck instead of steel posts as provided for in the contract. The trial court also found that
Birdwell suffered damages as a result of a defective roof on the deck.
Although Birdwell admits that the contract calls for steel posts, he argues that the wooden
posts are customary and McKinney did not object to their installation. Birdwell also alleges that
McKinney did not timely provide notice of the defective roof. In addition, Birdwell claims that
repair work performed on the roof is excessive and not provided for in the contract.
The evidence preponderates in favor of the trial court’s finding that Birdwell is responsible
for these damages. The decision of the trial court is affirmed on this issue.
Birdwell disputes the trial court’s finding that he breached the contract by constructing the
basement ceiling lower than the height specified in the contract. It is undisputed that the contract
provides that the basement ceiling is to measure 8'10". Birdwell acknowledged that the actual
5
Both parties challenge this finding.
6
From Birdwell’s brief, it is somewhat difficult to ascertain which specific findings of the
trial court that Birdwell contests.
10
basement height was five inches shorter on one end and eight inches shorter on the other end.
Birdwell claims that, before the cement was poured to make the floor, he marked a line on the wall
and asked Bradley McKinney if the height was suitable. Birdwell testified that McKinney said
“yes.”
Birdwell maintains further that the McKinneys waived any objections to the height by not
voicing their opposition earlier. Birdwell noted in his testimony that Bradley McKinney stopped
construction to voice his objection on numerous occasions throughout the construction process.
Thus, Birdwell contends that, had McKinney objected, he would have stopped construction at this
time. Birdwell also maintains that once the ceiling is boxed in, it will be able to satisfy the building
inspector’s requirement of 7'6".
Bradley McKinney denied having the conversation with Birdwell in which he purportedly
acceded to the modification of the height of the basement. The McKinneys also insist that timely
objections were made to both Birdwell and the architect, Steve Sloan. The McKinneys offered proof
by their expert that the ceiling could not be completed at a height of 7'6", as required by the building
inspector.
The trial court ruled that Birdwell breached the contract by not constructing the basement in
accordance with the agreement. It found that Birdwell did not prove that the McKinneys had orally
modified the contract. The trial court awarded the McKinneys $18,350.00, the value of repair as
determined by the McKinneys’ expert.
The preponderance of the evidence does not indicate that Birdwell satisfied his burden of
proving that the McKinneys orally modified this provision. Again, the trial judge is the best arbiter
of issues concerning credibility. Tenn-Tex, 778 S.W.2d at 425-26. The decision of the trial court
on this issue is affirmed.
Birdwell also contends that the trial court improperly awarded damages based on cost of
repair instead of on diminution in value. Birdwell cites Thomas v. Mardis, Greene Chancery C.A.
No. 106, 1987 WL 20189 (Tenn. App. Nov. 25, 1987), for the proposition that if construction of a
house has been “substantially performed” and repair would result in “unreasonable destruction,” then
diminution in value is the proper approach.
11
The Thomas case cited Edenfield v. Woodlawn Manor, Inc., 62 Tenn. App. 280, 462
S.W.2d 237 (1970). The Edenfield court, quoting from Am. Jur. (2nd), stated:
As a general rule, the measure of damages is the cost of correcting the defects or
completing the omissions, rather than the difference in value between what ought to
have been done in the performance of the contract and what has been done, where the
correction or completion would not involve unreasonable destruction of the work
done by the contractor and the cost thereof would not be grossly disproportionate to
the results to be obtained. On the other hand, the courts generally adhere to the view
that if a builder or contractor has not fully performed the terms of the construction
agreement, but to repair the defects or omissions would require a substantial tearing
down and rebuilding of the structure, the measure of damages is the difference in
value between the work if it had been performed in accordance with the contract and
that which was actually done, or (as it is sometimes said) the difference between the
value of the defective structure if properly completed. Despite this latter rule,
however, there is some authority to the effect that damages for a contractor’s breach
of a contract to construct a dwelling, where it is not constructed in accordance with
the plans and specifications, are the amount required to reconstruct it to make it
conform to such plans and specifications, rather than the difference in loan or market
value on the finished dwelling, since unlike a commercial structure, a dwelling has
an esthetic value and must be constructed as the owner wants it, even though the
finished dwelling may be just as good.
Id., 62 Tenn. App. at 287-88, 462 S.W.2d at 241 (quoting Am. Jur. 2d § 79) (emphasis in original).
Edenfield then adopted a rule in which a distinction is made between the standard applied for
commercial buildings and the standard for residential dwellings. Id., 62 Tenn. App. at 289, 462
S.W.2d at 241 (citing Fox v. Webb,105 So.2d 75 (Ala. 1958)). The court noted that, “in addition
to aesthetic tastes of the owner . . . there is also the matter of the owner’s comfort and convenience.”
Id., 62 Tenn. App. at 289, 462 S.W.2d at 242. Therefore, the court held that the cost of repair is the
appropriate measure of damages for a residential dwelling. Id.
Applying this standard to the case at bar, we find that the court did not err in awarding
damages based on the cost of repair. In light of Bradley McKinney’s height,7 it is understandable
that a few inches in ceiling height would be of importance.8 Furthermore, the couple helped design
the room in order to accommodate their aesthetic tastes. It is clear that they would be detrimentally
affected once the ceiling is boxed in to accommodate the plumbing and once light fixtures are
installed.
On appeal, Birdwell also claims that it was inappropriate for the trial court to rely on the
damages testimony of the McKinneys’ expert, John Ramsey (“Ramsey”). Birdwell asserts that
7
McKinney is 6'5".
8
Birdwell’s brief alleges that, although Bradley McKinney is a tall man, “he is not Krim
Abdul Jabbar [sic],” and, thus, the discrepancy in height should not bother him.
12
Ramsey’s estimates are based on homes built in Brentwood, Tennessee, and the Belle Meade area
of Nashville. According to Birdwell, these costs are much higher than the cost of construction in
Robertson County.
Birdwell failed to raise an objection concerning this testimony at trial. Therefore, Birdwell
is barred from asserting this defense on appeal. Pyle, 716 S.W.2d at 936.
Birdwell also challenges the trial court’s failure to award him $5,000.00 for “additional time
spend [sic] and delays in the performance of the Contract caused by McKinney’s actions.” The
preponderance of the evidence supports the trial court’s refusal to award these damages.
In addition, Birdwell seeks the recovery of prejudgment interest. Prejudgment interest was
not sought in the Complaint. The evidence does not demonstrate that Birdwell is entitled to these
damages. The trial court is affirmed on this issue.
In sum, the trial court’s computation of damages of $10,420.10 in favor of Birdwell is
modified to reflect the following awards credited to the McKinneys:
Stairs material and labor $1,214.11
Shower stall opening 900.00
Bathroom fixtures 4,200.00
Shelving installation 211.85
Total $6,525.96
In all other respects, the decision of the trial court is affirmed. Therefore, the trial court’s award of
$10,420.10 to Birdwell is modified to $3,894.14.
The decision of the trial court is affirmed as modified. Costs on appeal are taxed equally to
Appellant and Appellee, for which execution may issue if necessary.
HOLLY KIRBY LILLARD, J.
CONCUR:
DAVID R. FARMER, J.
SAMUEL L. LEWIS, J.
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